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Facts
The assessee filed a return of income declaring Rs. 11,68,530/-. The AO initiated proceedings upon receiving information about cash deposits of Rs. 24,44,100/- in the assessee's bank account. The AO treated these deposits as unexplained and added them to the income, completing the assessment under Section 144.
Held
The Tribunal restored the case to the Assessing Officer for a fresh assessment, granting the assessee one last opportunity to present their case and evidence, considering the defaults in procedural compliance were due to the assessee's counsel.
Key Issues
Whether the addition of cash deposits as unexplained income under Section 69A was justified, and if procedural non-compliance warrants a remand for fresh consideration.
Sections Cited
133(6), 69A, 144, 115BBE, 271AAС, 272A(1)(d), 250(6), 143(2), 142(1), 234B
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Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2017-18 Ravi Kant Sharma v. Income Tax Officer 2(3) 45, Athayen Faridpur Bareilly Athana Bareilly TAN/PAN:BCFPS0514M (Appellant) (Respondent) Appellant by: Shri P. K. Kapoor, C.A. Respondent by: Shri Sunil Kumar Rajwanshi, D.R. Date of hearing: 05 03 2025 Date of pronouncement: 11 03 2025 O R D E R
This appeal has been preferred by the assessee against order dated 20.11.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2017-18.
The brief facts of the case are that the assessee had filed his return of income for the year under consideration on 05.09.2017, declaring a total income of Rs.11,68,530/-. The case of the assessee was selected for scrutiny under CASS. The Income Tax Department was in possession of information that the assessee had deposited cash amounting to Rs.24,44,100/- in his Bank Account No.26730400007999 maintained with Bank of Baroda, Beharipur, Chhahal, Bihari Kapoor Marg, Bareilly during the period 09.11.2016 and 30.12.2016. The Assessing Officer (AO) issued statutory notices to the assessee, requiring the assessee to furnish the details relating to the cash deposits made by the assessee. However, there was no compliance from the side of the assessee. The AO called for information from Bank of Baroda, Beharipur, Chhahal, Bihari Kapoor Marg, Bareilly under section 133(6) of the Income Tax Act, 1961 (hereinafter called “the Act’) to Bank of Baroda, Bareilly, which furnished the bank account statement of the assessee for the relevant period, confirming deposits of Rs.24,44,100/-. Since the assessee had failed to respond to the statutory notices issued by the AO and furnish any explanation about the nature and source of cash deposits, the AO treated the cash deposits of Rs.24,44,100/- made by the assessee during the period 09.11.2016 and 30.12.2016 as unexplained money and added the same to the income of the assessee under section 69A of the Act. The AO completed the assessment under section 144 of the Act, assessing the total income of the assessee at Rs.36,12,630/.
2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271AAC and 272A(1)(d) of the Act, separately.
Aggrieved, the assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee by passing an order ex-parte qua the assessee for the reason of non- compliance.
Now, the assessee has approached this Tribunal challenging the dismissal of its appeal by the NFAC by raising the following grounds of appeal:
1.1. BECAUSE the ld. "CIT(A)" was not justified in dismissing the appeal in limine, by passing the impugned order ex-parte owing to non-compliance of notice of hearing, without affording sufficient and effective opportunity of being heard to the "appellant". 1.2. BECAUSE non-compliance during assessment proceedings as well as during appellate proceedings before the ld. "CIT(A)" was caused due to default from the end of the assessee's counsel owing to which the "appellant" could not ensure compliance of notices issued by ld. Assessing Officer and filing of written submission before the Id. "CIT(A)" and on a due consideration of this fact itself the matter deserves to be restored to Id. Assessing Officer for making assessment afresh after affording reasonable opportunity of being heard to the "appellant". 1.3. BECAUSE even in the ex-parte order, irrespective of non- appearance of the assessee before the "CIT(A)", the Id. "CIT(A)" ought to have dealt with the issues raised by the assessee in the grounds of appeal on merits by way of passing a speaking order after taking into consideration the material and information available on record as per provisions contained in section 250(6) of the Act.
2. BECAUSE without prejudice to the grounds hereinfore, no notice under section 143(2) of the Act was issued by ITO-2(3), Bareilly (who finally passed the assessment order), as such he did not validly assume jurisdiction to make assessment in case of the "appellant" as such the assessment order dated 21.12.2019 passed by him under section 144 of the Act was illegal and consequently the ld. "CIT(A)" ought to have quashed the assessment order being bad in law and wholly without jurisdiction. WITHOUT PREJUDICE TO THE GROUNDS HERE-IN-FORE 3. BECAUSE the ld. "CIT(A)" has erred in law and on facts in upholding the addition of Rs.24,44,100/-made by the ld. Assessing Officer by treating cash deposits and/or other credits in bank account as unexplained money under section 69A of the Act.
4. BECAUSE based on the information and material available on record, the Bank of Baroda (A/c No.: 26730400007999), in which the cash deposits amounting to Rs.24,44,100/- are alleged to be appearing, is neither owned by the "appellant" nor the said bank account belongs to the "appellant" and consequently the ld. "CIT(A)" ought to have directed the Id. Assessing Officer to delete the addition of Rs. 24,44,100/- made in assessment.
5. BECAUSE the addition of Rs.24,44,100/- made by ld. Assessing Officer was based wholly on incorrect facts as no business of petrol pump was ever carried out by the "appellant" and consequently the Id. "CIT(A)" ought to have directed the ld. Assessing Officer to delete the said addition of Rs.24,44,100/-.
6. BECAUSE the addition of Rs.24,44,100/- was made by ld. Assessing Officer without considering the material and information already available on record, rendering the assessment order under section 144 of the Act being passed in absolute violation of principles of natural justice and consequently the Id. "CIT(A)" ought to have directed the Id. Assessing Officer to delete the addition of Rs.24,44,100/-.
7. BECAUSE on a due consideration of the facts and circumstances of the case the ld. "CIT(A)" ought to have held that the provisions of sections 115BBE were not attracted in the present case.
8. BECAUSE on a due consideration of facts and circumstances of the case, the alleged cash deposits and/or other credits in bank account does not pertain to the "appellant" and consequently the Id. "CIT(A)" ought to have directed the Id. Assessing Officer to drop the penalty proceedings illegally and unjustifiably initiated under section 271AAC of the Act.
9. BECAUSE on a due consideration of facts and circumstances of the case, there was reasonable cause for failure on the part of the "appellant" to comply to notices issued under section 142(1) of the Act and consequently, the Id. "CIT(A)" ought to have directed the Id. Assessing Officer to drop the penalty proceedings illegally and unjustifiably initiated under section 272A(1) (d) of the Act.
10. BECAUSE on the facts and circumstances the "appellant" is not liable for interest under section 234B of the Act and consequently the ld. "CIT(A)" ought to have directed the Id. Assessing Officer to delete the interest charged under this section.
11. BECAUSE the order appealed against is contrary to facts, law and principles of natural justice.
BECAUSE each ground taken in appeal is mutually exclusive and without prejudice to each other.
The appellant craves leave to add, delete or modify any of the grounds before or at the time of hearing of appeal.
The Ld. Authorized Representative for the assessee submitted that there is a delay of 10 days in filing the appeal before the Tribunal. The Ld. A.R. further submitted that due to delay by the assessee in forwarding the relevant papers for filing the appeal, the appeal could not be filed in time. He prayed that the delay be condoned and the appeal be heard on merits.
The Ld. Sr. D.R. had no objection to the delay being condoned.
In view of the prayer made by the Ld. A.R. and no objection by the Ld. Sr. D.R., I condone the delay in filing of the appeal and admit the appeal for hearing.
During the course of hearing before me, the Ld. A.R. submitted that no proper compliance could be made before the lower authorities. He further submitted that certain details and documents relating to the transactions entered into by the assessee during the year under consideration could not be filed before the AO. The Ld. A.R. prayed that if an opportunity is given, the assessee will produce all the relevant documents in support of his claim before the AO.
The Ld. Senior D.R. had no objection to the restoration of appeal to the file of the Assessing Officer as requested by the Ld. A.R.
I have heard both the parties and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the assessee deserves one last opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the Assessing Officer with the direction to provide one opportunity to the assessee to present his case and produce the necessary evidences in support of the impugned transactions entered into by the assessee during the year under consideration. I also caution the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer shall be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.
In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 11/03/2025.